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Charter buys another cable
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May 27, 1999: 8:13 p.m. ET
In latest deal, Paul Allen's venture to buy Denver-based Fanch for $2B
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NEW YORK (CNNfn) - In its second acquisition in as many days, billionaire Paul Allen's Charter Communications said Thursday it will buy the Denver-based cable operator Fanch Communications in a deal industry sources valued at about $2 billion.
And don't expect the buying spree to end, Vulcan Ventures President Bill Savoy said Thursday evening. Vulcan, Microsoft co-founder Allen's investment arm and the money behind Charter, will continue to look for deals.
"As long as prices are reasonable, we'll continue to be aggressive," Savoy told the Moneyline News Hour with Lou Dobbs. "More cable buys would be nice."
He said that over the past 14 months, Vulcan has looked for cheaper buys in the cable industry than some of its rival cable consolidators such as AT&T.
It has achieved that, Savoy said, by picking somewhat smaller targets. "The bigger you buy, the more you have to pay as a control premium," he said.
Financial terms of the Charter-Fanch deal weren't disclosed, but sources pegged the deal around $2 billion, meaning Charter will pay $4,000 apiece for each of Fanch's 550,000 subscribers. Both companies are privately held.
The deal firmly establishes Charter, headed by Allen, as the fourth-largest cable operator in the United States. Allen has been on a push to use his cable operations to blaze the way to provide customers with high-speed telecommunications and Internet access.
"The Fanch Communications systems have the foundation for both digital cable and broadband and are quality additions to the 'wired world' Paul Allen and Charter are building," said Jerald L. Kent, Charter's CEO.
The majority of Denver-based Fanch's customers are based in West Virginia and Pennsylvania.
On Wednesday, Charter announced it was buying Los Angeles-based Falcon Cable for $3.6 billion in cash and stock. That follows plans announced last week to buy Michigan-based Avalon Cable TV for $845 million.
Charter's explosive growth will put it behind only AT&T (T), Time Warner Inc. (TWX) -- the parent company of CNNfn -- and Comcast Corp. (CMCSA) in the U.S. market.
Allen has spent more than $15 billion on acquisitions since buying Charter in 1998, including more than $7 billion so far in 1999.
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Charter Communications
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